Q4 2021 PDF Solutions Inc Earnings Call

February 15, 2022

Good day, and thank you for standing by and welcome to the PDF solutions fourth quarter and year end 2021 conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

For instructions will be given at that time and I would now like to hand, the collaborative Mr. Joseph <unk> of Lytham partners. Please go ahead Sir.

Thank you operator.

Thanks to all of you for joining us today on this call.

We appreciate your time and your ongoing interest in PDF solutions as the operator indicated my name is Joseph Diaz.

Some partners are the Investor relations consulting firm PDF.

If you do not yet have a copy of today's press release.

Helpful on the company's website at <unk> Dot com.

Some of the statements made during this conference call will be forward looking within the meaning of the private Securities Litigation Reform Act of 1995.

Including statements regarding Pdf's future financial results performance growth rates and demand for its solutions.

<unk> results could differ materially.

Forward looking statements and risks referred to on this call are based on information and hope to PDF today. The company has no obligation to update them.

You are advised to refer to the section titled risk factors on the company's annual report on Form 10-K for the fiscal year ended December 31, 2020, and similar disclosures in subsequent SEC filings.

With that I'd like to introduce John <unk>, PDF solutions, President and Chief Executive Officer, He will be followed by our non browser.

<unk>, Vice President and Chief Financial Officer at the conclusion of managements prepared remarks, we will open the call for your questions. Let me now turn the call over to John <unk>, President and CEO of PDF solutions John .

Thank you for joining us on today's call if you've not already seen our earnings press release and management report for the fourth quarter and the full year. Please go to the investors section of our website, where each has been posted.

As Adam will discuss in more detail 2021 was a record year for total revenue and a year, where our analytics business achieve tremendous growth.

Also exciting is the foundation that we have laid to establish a stronger business in 2022 and beyond.

In the fourth quarter, we celebrated our 30 <unk> year in business. So today. In addition to summarizing the progress we made in Q4, and 2021 and providing our expectations for the coming year I'll provide some perspective on our journey.

It's gotten PDF to this point and what we believe will position us for continued long term success.

During the 30 years, we've been a leader in analytics for some country manufacturing them.

Concerning consistent and persistent innovation.

We have achieved the applicant.

We have advanced the application and capabilities of our products and solutions by combining the team with extended longevity and deep knowledge of the company with a continuous addition of new team members that bring unique perspectives.

Besides our dedication to manufacturing analytics virtually everything else has changed over the years, including our customer base, selling and marketing strategy and fundamental business model.

For many years, our business was defined by the integrated yield ramp or what we call <unk>.

And that business, we accelerated our customers yield ramp like combining analytics with our characterization systems that provide the missing quality information that enable yield engineers to make the best improvements.

By the end of 2014, we realize the drivers of the <unk> business robust geometry, scaling and competitive foundry market, where waning. However.

However, we believe that the future drivers for the semiconductor industry would benefit from new applications of our manufacturing analytics.

We're the <unk> business had a handful of customers and a unique business model the new opportunities are across the entire industry and if I can.

Aspect of chip manufacturing not just the foundries ramping new nodes.

Today PBF customers number over 300. They include equipment companies that use our software to control their tools and communicate data from their tools to the SaaS.

The Alba from system companies that use our systems to qualify new products faster control yield and drive test quality.

And idms and foundries that use our software to control their wafer fabrication and increasingly package processing.

Many of these customers benefit from our cloud offering where the systems are managed by PDF for better availability and performance.

The business model once tied primarily.

Really to the ramp up of new nodes is now primarily subscriptions where customers pay ratably for access to whether to the cloud or on premise systems.

Q4, and 2021 demonstrate the success of the evolution that we have been making over the many years.

In particular analytics is now the vast majority of our revenue.

The customer base, it's much deeper and broader than before.

Development and manufacturing of new nodes is still an important part of our business as evidenced by the new yield ramp and the leading edge analytics engagements signed in the second and third quarters of 2021.

However, the majority of our extensive customers use our analytics platform for products that are built for more mature nodes.

Overall for 2021 bookings.

Bookings were up substantially over year over year and grew faster than chip industry revenues as we increase the value that we deliver to our customers from our cloud deployment and applications of CV and DSI systems for leading edge.

Our business is the equipment vendors also grew faster than the market as more companies better from our advanced control and communications options for symmetric software.

The synergy between symmetric products and the extensive platform enables PDF to advance the standards for new kinds of process equipment information and provide new analytics applications.

For the fourth quarter, we extended many of the trends we experienced in the previous quarters again extensively of cloud and on premise subscriptions were important contributions to our bookings.

The metrics onetime license activity with our equipment Oems was also strong as they shift our software with their tools.

In the fourth quarter. We also signed another quick stock contract with a leading.

Leading edge customer this time to apply our CV systems and design for manufacture ability applications.

We anticipate the quick start to convert to two significant business in 2022.

During the quarter, we also announced our partnership with Siemens <unk>, two <unk> with testing diagnostic products.

Customers on the Accenture cloud, we'll be able to use to further their root cause understanding by leveraging the market, leading logic and memory diagnostics capabilities from steam and DVA.

Coupled with our partnership with advent test an extensive new product introduction module. We believe extensive customers will be able to bring up their products faster and achieve entitlement yields which are critical in this supply limited world.

Following up on our December announcement, we had our first webinar for the Siemens partnership in January and experienced strong interest from engineers to IDM Fabless and system companies.

This builds on our collaboration with IBM for interoperability between <unk> and <unk>.

Our advanced test, Siemens and IBM partnerships as well as our strong partnerships with all of our symmetric Oems build on the foundation of PDF as an open and collaborative platform for semiconductor industry analytics.

They all stem from our core belief that analytics is more valuable to each of our customers when our capabilities integrated with the world semiconductor processing equipment.

It's available at any manufacturing facility in the world, where they're owned by a direct customer of one of their suppliers and is linked with the other software systems, such as EDA and Mes.

We believe that analytics, besides being useful when there are mountains of data to train algorithms like in the case for mature nodes.

Canadian customers for new process nodes, New assembly processing and products for which conventional machine learning techniques are inadequate.

As we began in 2022.

As we begin 2022, the semiconductor environment remains robust and demand for integrated circuits is broad based.

We anticipate continued demand for our analytics platform, particularly on the cloud from a broad base cross section of customers, including equipment companies Fabs <unk>.

Fabless system companies and tier one auto suppliers.

Governments, carmakers and tier one suppliers and system companies are all realizing the importance of semiconductor supply chain. This is driving interest in PDF products and services.

Given the industry tailwind I just summarized we anticipate continued revenue growth.

At our 2020 19 analyst day, we set a long term growth target for analytics at 20% compounded annual growth rate and.

And we have subsequently reconfirmed us.

We met this target in 2021, not only for analytics revenue, but for total revenue also.

In 2022, we again anticipate overall company revenue to grow above 20% in part due to strong 2021 bookings and continued momentum in new bookings.

For 2022, we also anticipate lower gain share levels for the year as we see the full year impact of the gain share contracts that concluded in the second quarter of 2021.

Our confidence in total revenue growth over 20% with full year of gain share decline implies that we anticipate analytics growing meaningfully above our 20% target again.

Overall, we expect 2022 to be a year of continued revenue growth.

I started off this talk reflecting on the past 30 years and the evolution, we have made in our business over the last eight years.

I don't want to take this time to remind our stockholders employees contractors and customers what this experiences reinforced in our culture.

We have demonstrated that we are willing and able to reinvent just about every aspect of our company to make sure a PDF solutions can serve our customer needs.

While reinventing our business, we remain true to our values employees and partners, while respectful to our stockholders.

For example over these last years, we have developed the ability to serve our customers test for control.

E beam characterization equipment data collection and assembly manufacturing all while building a SaaS business model from whole cloth.

We have accomplished these things by leaving it our team while welcoming new teammates and entire companies. So we can deliver the solutions our customers need.

This was accomplished by anticipating the changes our customers, we're going to see and make sure we could be there for them in advance of their needs.

Executives at our customers tell me that this anticipation and persistent investment for the future.

For their future needs as one of the key reasons why they select PDF as a critical supplier.

Moving forward, we will build on both our ability to sustain our differentiated capabilities, while developing and adopting new solutions that will enable us to serve our customers present and future needs.

Finally, I want to thank all of our PDF employees and contractors for their efforts during what has been an exceptional year.

We managed to work in type concert executing our largest bookings in revenue year in the history of the company.

Now I will turn the call over to <unk>, who will review the finances and provide his perspective on our business.

Thank you John Good afternoon, everyone. Good to speak with you again today and I Hope all of you and your families are well and enjoyed a great football weekend.

We're pleased to review the financial results of the full year in the fourth quarter of 2021.

We posted our earnings release Animatic report in the Investor Relations section of our website.

Our Form 10-K with final results will be filed with the SEC in early March after review by our auditors. Please note that all of the financial results are discussed in today's call will be on a non-GAAP basis and a reconciliation to GAAP financials is provided in the materials on our website.

As John indicated in his comments 2021 was a strong year for PDF solutions.

We generated record revenue of $111 million versus $88 million in 2020 at 26% year over year increase.

While 26% year over year revenue growth is remarkable in of itself. It is worth noting that the analytics business grew in 2021 at a rate well in excess of that.

Growth of analytics more than compensated for the expected decline in <unk> revenues.

Outgrowing, our 20% analytics revenue growth targets.

Analytics revenue increased 63% on a year over year basis and accounted for 84% of total revenue.

non-GAAP gross margin for the full year was 64% compared to 63% for the prior year.

Earnings per share on a non-GAAP basis came in at eight.

Versus negative two and 2020 at 10 <unk> per share profitability improvement.

Bookings were up more than 40% compared to full year 2020, and recall the 2020 was a record year for bookings.

Our backlog also increase.

66% versus last year, the increase in bookings and backlog give us confidence that 2022 will be another strong year for us and sets a meaningful base for total revenue growth in 2022 and beyond.

We believe we can continue to grow total company revenue at more than 20% for full year 2022, which means that analytics is expected to grow faster than our long term target model just as it did in 2021.

For the fourth quarter total revenue was $29 9 million up 34% from the comparable quarter last year and slightly better on a sequential basis from Q3.

Analytics revenue was up 88% to $27 3 million versus $14 5 million in the fourth quarter of 2020, and also slightly better on a sequential basis from Q3 2021.

non-GAAP gross margin for the fourth quarter came in at 65%.

Turning back to the full year 2021, I will now provide detailed comments.

For the full year analytics revenue increased 63% to $93 $4 million worth of 2020.

Our transition to become the leading analytics software provider to the global semiconductor supply chain is now taking hold.

Analytics is now the dominant component of our overall business the.

The number of large customers adopting our extensive platform of cloud continues to be strong.

We look for that trend to continue in 2022.

We are also very pleased with the symmetric contribution to the analytics results for the year from a strategic standpoint, the metrics has been complementary as we are able to capture more data from the equipment or drive machine learning applications.

Notably our full year 2021 analytics revenue was more than the 2020 total company revenue from just a year ago.

For 2021, <unk> revenue was $17 6 million down as expected from $30 8 million in 2020 and represented about 16% overall revenue.

As we expected and mentioned in past earnings calls in 2021, some of our key <unk> contracts came to the end of the gain share period and contributed to the large year over year decrease of IRR revenue from 2020 to 2021.

As expected.

The focus of our company remains analytics, however for select engagements, where we see possibilities of high margin long term royalties.

We'll capture those opportunities for our shareholders.

<unk>, our model to benefit us for many future years.

On a non-GAAP basis gross margin for 2021 increased to 64, 4% up from 63% in 2020 as revenue growth and expense management initiatives throughout the year contributed to the 140 basis point improvement.

We are proud that we accomplished this gross margin expansion against the backdrop of the end of high margin gain share revenue.

We continue to target a long term gross margin of 70% as shared during our 2019 analyst day and see a path to achieving it.

Bookings for full year, 2021 increased more than 40% compared to full year 2020.

This is growth on top of the remarkable booking year of 2020, where we had the large $50 million advent is booking.

Backlog at the end of the year totaled $179 5 million up 66% compared to the prior year.

Cost of sales increased 21% driven by a combination of some metrics and our increased cloud expenses to support the growth of our business.

SG&A expenses for the year totaled $30 8 million, representing a 17% increase from 2020 with R&D up 30% to $8 7 million.

Both primarily driven by the symmetric business, which carries higher gross margins and therefore carries the majority of costs and operating expenses.

For the year, we took a $3 $2 million write down for prior generation older equipment as required by rules for GAAP purposes only.

Capex for the year totaled $4 1 million versus $7 million in the prior year.

For the year, we generated positive cash flow $4 2 million as we successfully increased revenues and carefully managed expenses.

We are pleased with another year of positive positive operating cash flow generation consistent with our history.

Turning to the balance sheet, we ended the year with cash and equivalents of approximately $140 million compared to $145 million in the prior quarter and we carry no debt in terms of major cash uses during the year, we made stock buybacks of approximately $4 5 million paid for the symmetric Act.

Vision remaining hold back of $3 million and funded capital expenditures expenditures of approximately $4 million.

Coming off a robust 2021 performance, we head into 2022 with the business very well positioned for another solid year.

As I mentioned earlier, we believe we can grow total revenue in excess of 20% in 2022, even while experiencing a full year of <unk>, our revenue decline, which means that we expect analytics revenue to grow faster than our long term target model.

Late in 2021.

We have also successfully embedded our extensive platform into a critical mass of our core customers. We can now seek to manage our resources and cost of sales and shift our spend towards sales and marketing to expand our market footprint, leading to expanding our gross margins we.

We remain committed to our gross margin goal of 70% and believe we can make consistent incremental progress in the coming quarters and years ahead.

With growing revenues expanding gross margin and positive operating income contribution margin. We believe we can deliver and other profitable year for our shareholders. This year.

With that I'll turn the call over to the operator to commence the question and answer session operator.

Thank you presenters and at this time for the participants to ask a question. Please press star one on your telephone keypad.

And if he would like to withdraw your question you May press dependent.

And we have our first question from Christian Schwab from Craig Hallum. Your line is open Sir.

Hey, guys. This is Tyler on for Christian Thanks for letting us ask a couple of questions.

First I guess point of clarification. The quick start contract that you signed here in Q4, I just want to make sure. That's what the same customer that you booked a couple of previous contracts with over the last couple of quarters and then if so you know previously your time will these be multiyear type contracts I was wondering if you could maybe frame. The magnitude you know would you expect this customer to be up.

A 10% customer in 'twenty, two you called it significant revenue, but any framework around that would be helpful.

Yes sure.

This.

This quick start with a similar size to the previous quick start follow up contract.

We expect to be slightly smaller than the last one but a similar duration in part the mix of hardware and software elements of a little bit different this time than the previous one.

All right.

<unk>.

We are always very very comfortable talking about customers. So we really wont comment about specific customers. There that are there we do expect that there'll be at least 110% customer for us in 2022.

That's great I appreciate the color and then maybe a little bit.

Modeling question your Opex in Q4 was down sequentially.

700000, or so I think mostly due to sell it sell in our SG&A expense being down as we look to 'twenty. Two I was just wondering if you could help us think about Opex SG&A stay at similar levels in R&D ramp modestly as the invest for growth or was there any sort of onetime.

Thanks in Q4 that we should be aware of.

No look I mean from a operating profit perspective, just like we alluded in our comments, we would expect those margins to expand.

I think we also commented that we would manage the cost between our cost of sales at our operating expenses. So that we can invest more in sales and marketing side.

Specifically on the total spend we would expect that to expand.

Less than our total revenue growth rate, thereby increasing the thereby increasing the operating margin.

On the SG&A and the R&D spend.

I think we're feeling comfortable where we are but.

We will continue to work towards expanding the operating margin.

Alright, that's great I appreciate the color.

That's all from me guys. Thanks.

Once again to ask a question. Please press star one on your telephone keypad.

We have our next question from Tom <unk> from D. A Davidson. Please go ahead.

Yes, good afternoon, and thanks for the question.

I was wondering if you could give us a little bit of detail on.

On an organic basis for things like bookings or revenue for the year.

Yes, I think the color that we're providing is that.

Look first of all growth test growth continues to be strong. This year. Obviously there is the uplift that we have for the symmetric acquisitions as always carry the full year impact, but even without that we feel pretty happy about where the <unk> and the rest of the business pieces growth is coming in.

In terms of bookings I think we made the comment that it is up over 40% in terms of backlog. We made the comment that it is up over 6% to 6% around 2% to 6% for the full year basis.

So feeling pretty good about those two aggregate numbers and also within the component of the business, maybe Jon can highlight Cindy I wanted to point in time.

Recognize that the.

The symmetric runtime licenses, mostly a turns business right. So it doesn't really impact our bookings much more than the revenue. That's there. So if you kind of take your estimate of.

Some metrics revenue subtract that bookings you would say that the vast majority of the bookings came from.

You wanted to.

<unk> organic business.

Okay. That's helpful. Thank you John .

So John when you look at the DSI business on a go forward basis is that a business that will be ramping on a quarterly basis or are you kind of at a.

Let's say run rate with we see initial quick start customer.

Current levels that should be changed through the year.

Yes.

Besides a customer you have other activities going on we do anticipate it ramping through the year I don't know that linearly through the year kind of lumpy in the way that it would come on.

Do expect to ramp up through this year.

Yeah.

Timing exactly I would say between the second and third quarters.

Okay and between your traditional customer and it sounds like the two new customers.

Do you think you could have in the field by the end of this year.

Yes.

I don't think were limited will be limited by our ability at some point to put machines in place.

Our goal would be to have no more than two or three.

Following the World later this year.

Okay.

And then finally on the gain share piece.

So are you completely done with your old older traditional customers and.

Current gained shares now just.

Relatively due largely Asian customers.

Yes.

Correct.

As we said in the previous.

In our prepared remarks, right because we have a full years.

Without the historical contracts gained share will be down, but as we said on the previous.

A call on a quarterly basis. This level that we saw in Q3 and Q4 is roughly a floor on expected to slowly build back up.

Okay.

Quick question for quickly.

Quickly when you look at the <unk> expansion.

Does that change anything in the operating model.

No I think youre seeing the benefit of all of the business pieces. It's the metrics has done really well for a sensor is growing strong.

As well as the leading edge pieces, which is why you're hearing this optimism in our tone of talking about.

Increased revenue growth in the face of the decline of the <unk> impact on a full year basis number one number two youre hearing from us.

Gross margin was starting to feel confident and then therefore that should carry through the operating expenses and the operating profit expansion, which is why we're saying another profitable year for this year.

Great well. Thank you both for your time today.

Sure thing.

Yeah.

Once again, if he would like to ask any question you May press star one on your telephone keypad.

We have our next question from Gus Richard from Northland. Please go ahead.

Yes.

The question.

Just curious on the quick start.

Contracts were signed in the quarter is there a DSI component of that.

Yes. This is for.

As we said for DSM for foundry Fabless interface. So it's really just about software and characterization for design will go into the design and foundation IP primarily.

So it does not include the if I can't do it.

Okay.

Cvs in and that sort of thing.

So, yes, <unk> and our systems.

There's a layer of extensive pre analyses.

Foundation, IP and looks for weaknesses in foundation IP and helps the engineers optimize that so it is all geared around.

Foundry Fabless interface.

Okay, I understand the fixed cost related to this.

Yes.

And then.

Any color on what process node score.

Yes, I don't think that.

Just kind of protecting the confidence of the customers and I don't think I can say what's noted is typically of course these things are applied to newer nodes.

Okay, Alright got it.

Very helpful and then just.

Looking at the other ended up the process of spectrum.

Im wondering what youre seeing from trailing edge fabs.

And their need to improve their productivity.

Throughput in their Fabs is there anything that.

Extensive can do there to help those guys out and if so are you seeing any demand.

Sure, Yes, so I mean I think.

Not just on the Fabs, but on the test floor test operations.

This of course the.

Our customer base. So I was on the call probably month ago kind of a cubic quarterly technical review with an SVP of one of our customers. It does trailing.

Trailing edge, let's consider trailing edge chips or chips that are industrial and automotive and things like that and they were going over the way that the <unk>.

Test operations to improve their output on their test, Florida, and what they're able to get out in front of the deployments and rollout to cost more for some more facilities, we see that on the front end as well too with some of the new capabilities that extensive process control offers for the ability to look for preventive predictive maintenance issues on equipment and identify where.

And you can continue to run it towards where you need to.

Be more thoughtful and scheduled downtime.

So yeah.

A lot of the extent of the as I said in my prepared remarks.

Vast majority extensive usage is trailing edge stuff.

See that quite.

Being a very robust part of the business throughout 2021, a lot of the cloud deal for trailing edge guys and looking into 2022, we expect that to be the same as well.

So I think that's going to be a continued good opportunity to help customers get more productivity out of the fab fabrication assets.

Okay and then just.

The write down.

Equipment in the quarter.

Any more color on what that was.

You know what that was.

Yes.

Pushed.

Number of once you put <unk> into the field there was some spare parts and components that we had purchased in part of all of that as those machines. We've completed the usage of those machines. The extra components that we had associated with those machines, we wrote down.

Got it alright, that's it for me thanks, so much.

Once again to ask a question. Please press star one on your telephone keypad.

We have our next question from Android here from Sam Joe Capital. Please go ahead.

Hi, good afternoon guys.

Yes.

Hi, Adam.

Start thinking about the math correctly.

I take the back half of 2021 on the <unk> business or the like and even assume black are modest.

Kris from that run rate.

The 22 to get to a minimum of 20% growth it implies a minimum of 30% growth in the analytics business.

Yeah.

Assuming that that math right.

At the risk of stealing John's comment from a few calls ago <unk> math scores must be really good.

Yes.

Yeah.

Bob.

And then.

John .

Hoping you could talk about.

About whether or not you're starting to see any revenue contribution from the Siemens relationship if not when you would expect that and.

<unk>.

We should take out the size of the opportunities perhaps.

Or whether it's more of a commercial opportunity versus building a moat I think about the IBM partnership and the Siemens partnerships.

Sure, Yes, so when we did the webinar in January Andrew we announced that.

We were.

Having early access partners with customers.

Joined Siemens and asked what that means is.

They will use the beta version of the product there is a small charge for that it's not huge revenue. So we do expect revenue in this year associated with those early access customers and then they get beyond.

Access to the software they use it to debug and bring up their new products, they've got some ability to influence the roadmap product as we and Siemens finalize the feature set.

And then in terms of beyond that.

How is that.

How it generates revenue for us.

<unk>.

Paul diagnostic products are market leaders and so they have from what we can tell the largest share on the market.

There is a good overlap.

But when we look at the attendees of the webinar there were a number of companies on that list that were not previously sent to your customers and then even the companies that.

Work sent to your customers. It was parts of the organization that historically not been users of <unk> have been using probably the diagnostic tool. So we do expect it to grow the customer base, both within our existing customers as well as with new customers and I think the same will be true.

For Siemens as well.

In terms of the you.

He brought up the comments about IBM.

We heard if you listen to the questions that we got asked by the engineers on that Siemens webinar call as well as the comments, we get from customers about IBM and some of the other software systems that we we look to partner with.

Customers that are used to working on their phone and working on the cloud just expect apps to work with each other the old fashioned days. Okay. Now I've got to go do all of my own work to integrate software systems together to make them work is kind of a wave of the past, it's not what people expected, but still goes on Greg.

And companies, but it's not what people expect so many of the questions. We get asked by the Siemens Colbert. While it is this really just work out of the box can I just circle those dots on the <unk> graphics and automatically fire off a tough job and then when I look at the results back and extensive kind of just click and see automatically the snippets of the.

I met with default might be and that's all handled in the background on the software and pre integrated we did the same thing with the way we integrated Ibms aside you with <unk>. So that the engineers can past data back and forth without having to do any direct connection.

Do their own configuration, and the more and more we move.

And our partners to the cloud the more we can make those those integrations work out of the box for our customers and that's really a big part of the collaboration that we're doing with Siemens with IBM and with others.

So along those lines John .

<unk> talked a lot about in the past and.

The importance you view of building partnership sort of an ecosystem.

Yes.

What are the potential holes would you from a partnership perspective would you like to be able to fill in 2022.

Yes.

I want to blow any thunder on that stuff.

We'd like to be able to announce.

Some with some excitement when we announced that Andrew but I can say this if you just think about the way.

Company's work.

Obviously in this gasses questions alluded to there's a lot of issues about understanding my supply chain, where we're my parts or what's going on what's my prediction. If my yield dropped what does that mean downstream if I kind of have a problem, making unit shipments if a test Florida bottleneck. What is the implication of that if I add more testers without getting any more capacity.

Well I go to ship significantly more units. So theres a lot of customers want to be able to do to combine engineering pharma semiconductor engineering with what we would've called industrial engineering operations research. So there's a lot of activities. There that then touches what you want to do in finance.

As we look at product bring up in product diagnostics, there's a lot to do there to most customers are redesigned products.

Design products with lots of reuse the IP when you have a challenge on one product you would like to understand what the impact is across a wide variety of things. So all the ways of being able to answer questions.

Much more quickly you can think of it as like when I was a kid and I wanted to note something I think Doug My parents would take me to library. So it could go look stuff up my Kid just takes out his phone at dinner and it looks like Google searches all stuff, we had a debate of cilantro and keep them early cilantro and that now I'm sorry coriander.

<unk> the same thing and he just looked it up on this phone right I would have to go to the library for advocate. So those same kinds of questions that are engineered our customers want to be able to ask whether they have a financial implication and industrial engineering application.

Product design application or a menu.

Chip manufacturing, we want them to be able to answer those questions without having to go on to wrangle lots of data.

Okay and as you build this out I mean is that tied to the deployments of the decks networks.

Of course, yeah, right on because you want to let's say, okay, well, where do I have equipment that this would be exposed to or I'm going to change my screening criteria. At this part is you've got to take action to take action in our world means changing what goes on in equipment. It's not enough just to know its different you've got to do something about it. So is excellent as an important part of that but that's why overall, we see the platform as this plot.

For the industry for the industry to collaborate like we're having advent tests collaborate with its customers and in a way that.

Lets people cross kind of operational boundaries. So you can get the most productive capacity.

Capacity in the world and that gets the gases questions around.

In this environment, how do I get more chips out may have.

Or are customers asking for all time.

Okay, great. Thank you.

Once again, if you would like to ask a question you May press star one on your telephone keypad.

There are no further questions at this time I will turn the call over to Mr. <unk> for closing remarks.

Thank you for participating in our Q4 call. We look forward to talking with you again soon have a great day.

Ladies and gentlemen. This concludes today's presentation. Thank you for participating you may now disconnect.

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[music].

Okay.

Sure.

Yes.

Sure.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

Thanks.

Yes.

Okay.

Sure.

Okay.

Sure.

Yes.

Thanks.

Okay.

Thank you.

Yes.

[music].

Yes.

Okay.

Sure.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

[music].

Okay.

Yes.

Okay.

[music].

Yes.

Okay.

Yes.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Sure.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Okay.

Yes.

[music].

Yes.

Okay.

Yes.

Sure.

Yes.

Okay.

[music].

Yes.

Okay.

<unk>.

Okay.

Yes.

Okay.

Yes.

Thanks.

Thank you.

Okay.

Sure.

[music].

Thank you.

Yes.

Okay.

Yes.

Sure.

Okay.

Yes.

Okay.

Yes.

Okay.

Thanks.

Yes.

Okay.

Yes.

Sure.

Thanks.

Okay.

[music].

Yes.

Okay.

Yes.

Thank you.

Thanks.

Yes.

Okay.

Thanks.

Okay.

Thank you.

Okay.

Yes.

Sure.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Thank you.

Yes.

[music].

Okay.

Yeah.

Yes.

Okay.

Yes.

Okay.

Yes.

Sure.

Okay.

Yes.

Okay.

Yes.

Sure.

Thanks.

Yes.

Yeah.

Okay.

Sure.

Okay.

Yes.

Yeah.

Okay.

Yes.

Okay.

Great.

Okay.

Yes.

<unk>.

Okay.

Right.

Yes.

Okay.

<unk>.

Yes.

Okay.

Sure.

Okay.

Yes.

Okay.

[music].

Sure.

Okay.

Yes.

Sure.

[music].

Thanks.

Okay.

Yes.

Yeah.

Okay.

Yes.

Thanks.

Okay.

Yes.

Sure.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

Okay.

Yes.

Yeah.

Yes.

Okay.

Uh huh.

Yeah.

Okay.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Sure.

[music].

Yes.

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